New Jersey’s Democratic Gov. Phil Murphy on Monday explained that inflation and rising consumer prices may be the effect of a strengthening U.S. economy and rising opportunities throughout the labor force.
Murphy said that plentiful opportunities have allowed workers to be selective about the positions they take, causing employers to raise pay – a cost that can be passed onto consumers.
"Folks leave because they have a confidence that they can upsell themselves, upskill themselves to a more value-added, higher-paying jobs," Murphy said during a press briefing. "I believe you’re seeing a lot of that right now … But paying people more and then passing that on to the consumer, that we’ve been seeing for several months, the expectation that inflation rates would go up at least a little bit I think is a reasonable one."
In what Murphy characterized as a "sinking economy," he said workers leave their jobs for a negative reason.
Core CPI, one measure commonly used to gauge inflation, rose 5.4% year over year in June, which marks the fastest pace in more than a decade.
Meanwhile, business owners in many states have said they are unable to hire qualified workers – which is one reason some governors ended participation in a federal unemployment assistance program that they believe may have been keeping workers from seeking out new jobs.
Murphy also acknowledged that the $300 federal unemployment boost, which has been terminated by governors in many Republican states, may have discouraged unemployed workers from actively looking to re-enter the workforce.
"I said all along I thought it might be a contributor, but it was one of many contributors to this challenge," Murphy said.
Plaintiffs in several states where unemployment benefits were ended early have sued the state governments to have them reinstated. Judges ruled in favor of the plaintiffs in a few cases, including Maryland and Indiana, but sided with the state government in Ohio.